Energy prices support their strong cash flow

Article Excerpt

The shares of oil and gas stocks remain high as the U.S. and other economies recover—and with the Ukraine conflict. We continue to recommend that most investors maintain some exposure to the oil and gas industry as part of a balanced portfolio. But to cut risk, you should stick with producers that have positive cash flow even in times of low energy prices. Here are two that meet that requirement. On top of that, they pay dividends: PEYTO EXPLORATION & DEVELOPMENT, $13.20, is a buy for aggressive investors. This producer (Toronto symbol PEY; Shares outstanding: 169.3 million; Market cap: $2.2 billion; TSINetwork Rating: Speculative Risk; Dividend yield: 4.6%; www.peyto.com) focuses on both gas and oil in Alberta. Its production is 88% gas and 12% oil. In the quarter ended March 31, 2022, output rose 15.3%, to 101,549 barrels of oil equivalent per day from 88,070 a year earlier. Cash flow jumped 69.0%, to $1.20 a share from $0.71. The higher production and increased oil and gas…